Question 1

Assuming that there is a net loss for the period debits equal credits in all but which section of the worksheet?

Accepted Answer

The income statement columns are where revenues and expenses are recorded, and if there is a net loss, the total debits will be less than the total credits. In the adjustments, trial balance, and adjusted trial balance columns, the debits will always equal the credits regardless of whether there is a net loss or gain.

Question 2

The net income (or loss) for the period

Accepted Answer

The net income (or loss) for the period is found by computing the difference between the income statement columns of the worksheet. The income statement columns of the worksheet show the revenues and expenses for the period, and the difference between the two is the net income or net loss. The other options are incorrect – choice A refers to the computation of net income (or loss) on the work sheet, but the procedure described is not correct, choice B is incorrect because the net income (or loss) can be found on the worksheet, and choice D refers to the computation of adjusted trial balance, which is a step in the accounting cycle, but does not directly result in the computation of net income (or loss).

Question 3

Each of the following accounts is closed to Income Summary except

Accepted Answer

Expenses and Revenues are closed to Income Summary because they represent the main activities of the business during the period. Owner's Drawings are not closed to Income Summary because they represent the owner's withdrawals from the business, and are not related to the business activities or revenues during the period.

Question 4

Adjusting entries are prepared from

Accepted Answer

Adjusting entries are typically prepared in the adjustments columns of the worksheet. This allows for easy analysis and verification of the adjustments before they are recorded in the general ledger. Source documents are used to record transactions and events, but are not used to prepare adjusting entries. The general ledger is used to record all transactions and events, but adjusting entries are typically prepared before being posted to the general ledger. Last year's worksheet may be used as a reference, but it is not the source of adjusting entries.

Question 5

When using a worksheet adjusting entries are journalized

Accepted Answer

The answer of When using a worksheet adjusting entries are...

Question 6

The income summary account

Accepted Answer

The income summary account is a temporary account used to summarize revenue and expense accounts at the end of an accounting period. Its balance is transferred to the retained earnings account or the owner's capital account at the beginning of the next period. It does not appear on the balance sheet, but it is used in the preparation of the income statement. Therefore, the correct answer is D, it is a temporary account.

Question 7

The income statement and balance sheet columns of Beer and Nuts Company's worksheet reflect the following totals:  To enter the net income (or loss) for the period into the above worksheet requires an entry to the

Accepted Answer

Net income (or loss) is entered in the income statement credit column and the balance sheet debit column. This is because net income increases retained earnings on the balance sheet and is itself a credit on the income statement.

Question 8

A worksheet is a multiple column form that facilitates the

Accepted Answer

The primary purpose of a worksheet in accounting is to facilitate the preparation of financial statements by organizing data in a structured format.

Question 9

Closing entries are

Accepted Answer

Closing entries are journalized in the general journal to transfer the balances of temporary accounts to permanent accounts.

Question 10

The worksheet does not show

Accepted Answer

The answer of The worksheet does not show
...

Question 11

The account Supplies will appear in the following debit columns of the worksheet.

Accepted Answer

The account Supplies will appear in the debit column of the Trial balance, Adjusted trial balance, and Balance sheet as it is an asset account. Therefore, Option D is correct.

Question 12

After the adjusting entries are journalized and posted to the accounts in the general ledger the balance of each account should agree with the balance shown on the

Accepted Answer

The adjusted trial balance is prepared after making adjusting entries and it lists all the accounts and their balances after adjustment. The purpose of the adjusted trial balance is to ensure that the total debits equal the total credits and that each account has the correct balance, including the effect of adjusting entries.

Question 13

The income statement and balance sheet columns of Beer and Nuts Company's worksheet reflect the following totals:  The net income (or loss) for the period is

Accepted Answer

The answer of The income statement and balance sheet columns...

Question 14

Which of the following companies would be least likely to use a worksheet to facilitate the adjustment process?

Accepted Answer

A smaller company with fewer accounts may not require a worksheet to facilitate the adjustment process as the number of accounts is small enough to track without the use of a worksheet. While worksheets are not required under generally accepted accounting principles, they are commonly used to help with the adjustment process, especially for larger companies with numerous accounts that can become more complex to manage without a clear organizational tool.

Question 15

Closing entries are made

Accepted Answer

Closing entries are made in order to transfer net income (or loss) and owner's drawings to the owner's capital account at the end of the accounting period. This prepares the accounts for the next period's transactions, and allows for the preparation of the financial statements. Option A is incorrect because closing entries do not terminate the business. Option B is incorrect because it is not necessary for all accounts to have zero balances at the end of the accounting period.

Question 16

If the total debits exceed total credits in the balance sheet columns of the worksheet owner's equity

Accepted Answer

The answer of If the total debits exceed total credits...

Question 17

Closing entries are necessary for

Accepted Answer

Closing entries are necessary for temporary accounts only. These accounts include revenue, expense, and dividend accounts. The purpose of closing entries is to transfer the balances of these accounts to the retained earnings account or, in the case of dividend accounts, to reduce the retained earnings account. Permanent or real accounts are not closed at the end of the accounting period and their balances carry forward to the next period.

Question 18

When constructing a worksheet accounts are often needed that are not listed in the trial balance already entered on the worksheet from the ledger. Where should these additional accounts be shown on the worksheet?

Accepted Answer

Additional accounts that are not listed in the trial balance should be inserted on the lines immediately below the trial balance totals. This helps to keep the trial balance organized and allows for easier identification of any discrepancies or errors.

Question 19

A worksheet can be thought of as a(n)

Accepted Answer

A worksheet is not a permanent accounting record, but rather a tool used by accountants to aid in the preparation of financial statements. It is not a part of the general ledger or journal, but rather a separate document used to organize and summarize information from those records. While worksheets can be helpful, they are not mandatory and some accountants may choose not to use them.

Question 20

If the total debit column exceeds the total credit column of the income statement columns on a worksheet then the company has

Accepted Answer

If the total debit column exceeds the total credit column of the income statement columns on a worksheet, it means that expenses exceed revenues and the company has suffered a net loss for the period. This is because expenses are debits and revenues are credits, so if the debit column is greater than the credit column, it means that expenses are higher than revenues. Therefore, the correct choice is C.

Quiz 4: Completing the Accounting Cycle